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Louis Marlin's Class Action Mediation Checklist

Louis Marlin's Class Action Mediation Checklist

Source:

Date:
February 2017

Class Action
Settlement Checklist
Louis M. Marlin, Esq. Mediator, Arbitrator & Discovery Referee
As most attorneys are aware, the settlement of a class action can be quite
complicated. Unlike “one vs. one” cases, class actions involve terms that go beyond
simple dollars and cents issues. This is particularly true since trial courts are known
to carefully scrutinize proposed settlements at the preliminary approval stage.
The purpose of the following Checklist is to provide the class action practitioner
with a list of settlement related topics to be considered during the mediation
negotiation process. While it is certainly likely that not all of these items will come
into play in every class action, and this list is not meant to be all-inclusive, it is
hoped that the list will serve as a tool that will help counsel avoid unnecessary
pitfalls. It is also hoped that attorneys will consider addressing some or all of
these matters in a Memorandum of Understanding (MOU) to be executed at the
conclusion of the mediation.
q What is the agreed-upon definition of the class?
q Are there going to be sub-classes? If so, what is
their definition?
q What is the size of the class?
q What is the amount of the settlement? Does the
amount of the settlement change if the class
proves to be larger or smaller than anticipated?
q What other factors could result in a change in the
amount of the settlement?
q What is the agreed-upon starting date for the
“class period”?
q What is the agreed-upon “ending date” concerning
when the settlement will apply?
q Is there a “blow up” provision that will void
the settlement if a defined percentage of class
members choose to opt out? If so, what is the
percentage?
q Will class members have to make a claim to share
in the settlement (a “claims-made” settlement)?
q If this is a claims-made settlement, what will be
the nature of the claim form? Will it be simple
(i.e., name, address, social security number and a
simple declaration under oath), or more complex.
NOTE: the more complex a claim form is, the more
likely it will be rejected by the court.
q Who will write the first draft of the claim form?
q If no claim form is required, will each class
member be given an individualized estimate of
their share of the net settlement at the time the
notice of settlement is disseminated?
q Whether or not a claim form is required, how will
class members challenge the determination of
their share of the settlement fund?
q Will the claims administrator have the authority
to resolve disputes with class members? Will your
judge approve this methodology?
q Do the parties agree that any of the unclaimed
funds (in a claims-made settlement) will revert
to the defendant(s)? If so, how will that be
determined? NOTE: many courts are now routinely
rejecting settlements that contain reversion
clauses. Some will permit them as long as there is
a “floor” that will be paid out, no matter what.
q Is there a minimum amount each class member
will receive?
q Will notice to the class be required? In all but the
rarest of “injunctive relief-only” class actions, the
answer is yes.
q Which party will draft the notice, subject to
approval by the other side?
continued Class Action Settlement Checklist continued
q Does your judge have a particular type of
form of notice she/he requires or prefers? If
so, a great deal of lost time can be avoided by
crafting the proposed notice to meet the judge’s
requirements.
q How will the terms of the settlement be
described in the notice?
q Will the notice clearly indicate the manner in
which the settlement proceeds will be shared
among the class members?
q The notice will no doubt require the plaintiffs’
counsel to set forth the contingent fee they are
seeking. Will the defendant object to that fee
request?
q How will the notice and accompanying
documents be disseminated to the class
members?
q Will any electronic methods, such as email, be
used to disseminate the notice? If so, how will
you establish the viability of this method to
satisfy the trial court?
q What costs will be deducted from the gross
settlement fund (i.e., costs of administration,
attorney fees, etc.)?
q In wage and hour litigation, will the employer
pay the employer side payroll taxes?
q Exactly what is the scope of the release that will
result from each class members’ participation
in the settlement? NOTE: It is absolutely critical
that the parties agree upon the extent of the
release (i.e., what claims are being released by
the class members), and its specific language,
prior to or at the mediation.
q As is most common, is this an “opt out” class?
q How much time will each class member have
to opt-out after mailing of the class settlement
notice? NOTE: I do not know of any judge
approving an opt out period of less than 30 days.
Most require 45 to 60 days.
q What will a class member have to do to opt
out of the settlement? Will an opt-out form be
included with the class settlement notice, or will
the class member have to take other action to
opt out?
q How much time will class members have to
object to the settlement?
q What will a class member have to do to object to
the settlement terms?
q Who will write the first draft of the formal
settlement agreement?
q Is there a time limit on completion of the first
draft of the settlement agreement, the notice and
the claim form?
q Will the settlement begin to draw interest after
a specific date if the parties are waiting for
preliminary or final approval?
q Will the motion for preliminary approval be a
joint motion, or a motion by the plaintiffs only?
q If a joint motion, who will write the first draft,
and what is the deadline for completing the
same?
q Who will select the administrator? Will there be
input from the other side?
q Will the party selecting the administrator obtain
bids from more than one possible administrator?
q Will the existence of the settlement remain
confidential until the court grants preliminary
approval?
q When will settlement funds be deposited with
the administrator?
q Will deposited funds draw interest?
q Will the motion for final approval be a joint
motion? If so, who will prepare the first draft?
q How much time will pass after final approval
before distribution of the settlement funds? Any
variation based on objectors?
500 North State College Blvd. | 14th Floor | Orange, CA 92868
lmarlin@jamsadr.com | Tel: 714.937.8251 | Fax: 714.939.8710
Resolving Disputes Worldwide | www.jamsadr.com/classaction

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